Mammalian lysyl oxidase (LOX) is essential for the catalysis of lysyl-derived cross-links in fibrillar collagens and elastin in the extracellular matrix and has also been implicated in cell motility, differentiation, and tumor cell invasion. The active LOX has been shown to translocate to the nuclei of smooth muscle cells and regulate chromatin structure and transcription. It is difficult to interpret the role of the LOX protein as it is co-expressed with other members of the LOX amine oxidase family in most mammalian cells. To investigate the function of the LOX proteins, we have characterized the Drosophila lysyl oxidases Dmloxl-1 and Dmloxl-2. We present the gene, domain structure, and expression pattern of Dmloxl-1 and Dmloxl-2 during development. In early development, only Dmloxl-1 was expressed, which allowed functional studies. We have expressed Dmloxl-1 in S2 cells and determined that it is a catalytically active enzyme, inhibited by beta-amino-proprionitrile (BAPN), a specific LOX inhibitor. We localized DmLOXL-1 in the nuclei in embryos and in adult salivary gland cells in the nuclei, cytoplasm, and cell surface, using immunostaining and a DmLOXL-1 antibody. To address the biological function of Dmloxl-1, we raised larvae under BAPN inhibitory conditions and over-expressed Dmloxl-1 in transgenic Drosophila. DmLOXL-1 inhibition resulted in developmental delay and a shift in sex ratio; over-expression in the w(m4) variegating strain increased drosopterin production, demonstrating euchromatinization. Our previous data on the transcriptional down-regulation of seven ribosomal genes and the glue gene under inhibitory conditions and the current results collectively support a nuclear role for Dmloxl-1 in euchromatinization and gene regulation.